The Department of Health is piloting a new scheme which will see drug treatment providers rewarded for the results they achieve from 2011.

This payment-by-outcomes approach will be the first of its kind for drug treatment and rehabilitation and forms part of the new Public Health Service approach. The White Paper on public health, which describes the creation of the new Public Health Service, will be published later this year, and will pave the way for a more local approach to public health as well as a cross-government approach.

Anne Milton, parliamentary under-secretary of state for public health, explained to an audience of drug treatment providers at a conference organised by charity DrugScope that recovery will be at the heart of the government’s new drug strategy, and the creation of a Public Health Service will help people get off drugs and deal with the wider issues behind their addiction.

Milton said: “We need to get the incentives right so people don’t cherry-pick [straightforward cases] and aren’t penalised for taking on harder cases.

“A payment-by-outcomes approach will be the first of its kind. But it’s challenging to achieve in practice, which is why we want to pilot this first.”

Local areas are to be identified later this year with payment system pilot schemes to be co-designed from 2011.

From 2011 the Department of Health will take responsibility for a portion of the drugs budget previously controlled by the Home Office and the Ministry of Justice.

The DoH says that every £1 spent on rehabilitation potentially saves public services £2.50 in the long-term.

Martin Barnes, chief executive of DrugScope, said: “There is much support in the drug sector for the government’s emphasis on supporting recovery and improving treatment outcomes, but currently significant and understandable concerns exist over driving this by a system of payment-by-results.

"Although the principle of payment-by-outcomes is sound, there are many issues when it is applied to services addressing complex and multiple needs. Although a truism, the devil really is in the detail and we hope that the government will consult further on its specific plans for implementation. We welcome the commitment to piloting and the recognition of the need to avoid unintended consequences, such as the ‘cherry picking’ of service users and disadvantaging smaller providers.”